Metalloinvest mining mulling KGOKOR project participation

Sunday, 06 Feb 2011
Ukrainian Journal reported that Russia Metalloinvest mining and metal holding is still considering taking part in the project to complete the Kryvy Rih oxidized ore mill also known as KGOKOR.

A January 28 report of Ukraine’s Antimonopoly Committee says that Russia CJSC Metalloinvest applied to the committee regarding the purchase of a 25% stake in Ukrainian Ore Metallurgical Company Ltd created on the parity basis with Smart group to complete KGOKOR.

The report said "A permit to buy a share in Ukrainian Ore-Metallurgical Company Ltd was given to CJSC Metalloinvest which grants it over 25% of the votes in the governing body of the company."
(sourced:Ukrainian Journal)

Metinvest aiming for 25 million tonnes steel

Sunday, 06 Feb 2011
Reuters reported that Ukraine largest mining and metals group Metinvest planned to boost steel output to 25 million tonnes in the long run through acquisitions and modernization of its existing facilities.
Metinvest quoted its director Mr Ihor Siryi as saying in a statement that "Our long term target is to reach the level of 25 million tonnes of steel per year. This will make us No 5 in the world."
(sourced:Reuters)

ArcelorMittal boosts Ukrainian steel output in 2010

January 31, 2011
Reuters reported that Ukraine No 1 steel mill, owned by ArcelorMittal, raised crude steel production in 2010 to 6.13 million tonnes from 5.04 million tonnes in 2009.
Rolled steel production rose to 5.41 million tonnes last year from 4.50 million, while pig iron output rose to 5.32 million from 4.42 million a year earlier.
Ukrainian industry officials said this month that local steel companies produced a total of 32.7 million tonnes of crude steel in 2010 but planned to increase output by about 6% in 2011 to 34.5 million tonnes.
Steel producers' union Metallurgprom forecast rolled steel output to rise to 32.8 million tonnes this year from 30.68 million in 2010, while pig iron output would jump to 28.9 million tonnes from 27.4 million.
But analysts said Ukraine's key export oriented steel sector, largely dependent on the situation on the world market, is unlikely to show a significant rise in output in 2011 due to unstable demand from abroad. (sourced:reuters)

EU steel market - Divide increases between North and South

January 31, 2011
European price movements can be dissected into North and South.
While Northern Europe viz., Germany and neighbouring countries price movements is reminiscent of the peaks of 2007 & 2008, in South Europe the increases have been subdued.
Domestic mills in Spain and Italy have increased HRC basis parity price up to EUR 640 per tonne and EUR 620 per tonne, respectively. However, customers are quite reluctant to book at new levels, bidding EUR 20 per tonne to EUR 30 per tonne less.
Import others are not attractive as prime mills are quoting above EUR 600 per tonne CFR FO at sight. Only Ukrainian mills are offering around EUR 560 per tonne to EUR 570 per tonne CFR FO at sight. However poor quality and low coil weight make this material unattractive.
HRP and HRC prices in Germany have taken a big jump during past week. The HRC prices are well above EUR 600 per tonne CFR FO Antwerp with peaks touching EUR 650 per tonne CFR FO.

HRP are offered by the domestic mills at prices beyond EUR 700 per tonne basis parity with imports reaching EUR 620 per tonne CFR FO Antwerp and even more.
Mills are deliberately maintaining low quantities to justify further increases.
The recent correction in scrap prices had negligible impact as mills have taken advantage with prices jumping depending on category and product by EUR 20 per tonne to EUR 50 per tonne.
Debars and wire rod are offered in the domestic market at prices around EUR 550 per tonne to EUR 600 per tonne in both Spain and Italy while in Germany these levels have been surpassed.
Exports from Spain and Italy are at levels of EUR 530 per tonne to EUR 500 per tonne FOB ST for debars and wire rod respectively.

Imports are not unattractive for the time being. Turkish offers have receded to levels lower than USD 700 per tonne for debars and wire rod.
The trend seems quite sell settled and prices are most probably remaining under pressure for the weeks to come. That should be quite sure for North Europe market where general economy situation has definitely jumped beyond the last crisis hurdles and is running at best levels of the last 5 years.

In South Europe the situation is still critic as both Spain and Italy are still fighting with a general economy situation still far from a complete recovery. Unemployment levels are still quite high, especially in Spain where still almost 20% of the working force is without a fixed employment, GDP perspectives are indicating an economy that is increasing by mere 1% or even, investments are lacking and bank financing is still short and erratic. In this scenario, the consumption is obviously not fully supporting the price trend demonstrated by the price difference with North Europe as indicated above. So for South Europe the positive present trend might be short lived.

Ukraine metallurgical companies increase sales by 45pct in 2010

Monday, 31 Jan 2011
According to the data issued by Ukraine State Statistics Committee, in 2010 the country metallurgical companies increased their product sales by 45.3%YoYto about UAH 189.442 billion.As per report, in 2010, the share of metallurgical companies in Ukraine total sale of industrial products amounted to 21.3%. In 2009, Ukraine metallurgical companies saw a 31%YoY decrease in their product sales to UAH 130.354 billion.(sourced:steelorbis)

Ukraine in talks with US firms to develop Black Sea shelf

Friday, 28 Jan 2011
RIA Novosti citing Mr Nikolai Azarov Prime Minister of Ukraine as saying that, Ukraine intends to buy a drilling platform from Singapore this year to extract hydrocarbons on the Black Sea shelf and reduce its dependence on natural gas imports.

The Kerch section of the Black Sea shelf alone has been estimated to contain 10.8 billion cubic meters of natural gas, which could increase Ukraine annual gas production by 4 billion cubic meters and oil production by 3 million metric tons.

Mr Azarov said Ukraine was also negotiating the purchase with other countries and planned to extract gas from alternative sources, such as shale and coal layers. He said that "We are in talks with an American company on transfer of the relevant technology, adding that the government's plans were above all aimed at reducing Ukraine's dependence on gas imports from Russia.”

Although the Black Sea shelf is rich in hydrocarbons, they lie around two kilometers under water and can only be reached by floating drilling platforms. Ukraine Chernomorneftegaz oil and gas Exploration Company currently only has stationary platforms that do not reach beyond 70 meters.
(Sourced from RIA Novosti)

Chinese iron ore imports from Brazil and India fall sharply in 2010

Monday, 24 Jan 2011

Reuters quoted according to data issued by customs that Chinese imports of iron ore from Brazil and India fell sharply during 2010 while Australian shipments inched up slightly over the year.

Shipments from India fell 9.98% to 96.59 million tonnes in 2010, and Brazilian deliveries declined by 9.09% to 130.86 million tonnes compared to a year earlier.
Imports from Australia reached 265.33 million tonnes up by 1.36%YoY.

China stung by its dependence on the three dominant global supplier countries, vowed early last year to diversify its sources of iron ore. Australia, Brazil and India provided 79.7% of China total iron ore imports over 2010 down from 81.5% in 2009 and much of the gap was met by increasing shipments from countries such as Iran, Ukraine and Venezuela.
(Sourced from Reuters)

Top 10 steel producing countries in 2010, China, Japan, United States, Russia, India...

Saturday, 22 Jan 2011

Rank	Country	2010	2009	Change
1	China	626.7	573.6	9.3
2	Japan	109.6	87.5	25.2
3	United States	80.6	58.2	38.5
4	Russia	67.0	60.0	11.7
5	India	66.8	62.8	6.4
6	South Korea	58.5	48.6	20.3
7	Germany	43.8	32.7	34.1
8	Ukraine	33.6	29.9	12.4
9	Brazil	32.8	26.5	23.8
10	Turkey	29.0	25.3	14.6

In million tonnes
(Source - worldsteel.org)

Australia's BC Iron agrees $341 million bid by Regent Pacific

Thu Jan 20, 2011 11:02pm GMT

* Cash offer a 4pct premium to last trade

* Regent says no change to BC Iron management, strategy

* Consolidated Minerals biggest shareholder (Adds detail)

SYDNEY, Jan 21 (Reuters) - Australia's BC Iron has recommended a cash takeover offer from major shareholder Hong Kong's Regent Pacific Group in a deal valuing the company at A$345 million ($341 million).

Regent, which is BC Iron's second-largest shareholder with a 19.87 percent stake, is offering A$3.30 cash per share. The offer is a 4 percent premium to BC Iron's last trading price of A$3.17.

BC Iron's biggest shareholder is Consolidated Minerals, owned by Ukrainian billionaire Gennadiy Bogolyubov's Palmary Enterprises.

BC Iron and Regent's shares were placed in a trading halt on Wednesday pending the transaction. BC Iron's core asset is its Nullagine coal project, a 50-50 joint venture with Fortescue Metals .

"Regent Pacific is seeking to be a long term player in both the growth and development of BC Iron and the Australian iron ore sector," Regent Pacific Chief Executive Jamie Gibson said, adding there were no plans to change the target's current management or strategy.

The venture plans to utilise Fortescue's transport facilities at its Christmas Creek iron ore mine, 50 kilometres south of Nullagine, to rail ore to Port Hedland for shipping to overseas steel mills.

Iron ore is currently being stockpiled and the first shipment from Port Hedland is expected in the first quarter of 2011 -- four years after BC Iron listed on the Australian stock market. The company plans to export 1 million tonnes by June 2011 and then operate at an annual rate of 3 million tonnes.

Under the terms of the partnership, Fortescue buys BC Iron's share of the iron ore at the "mine gate" and assumes responsibility for shipping and marketing.

Fortescue is already operating at an annual rate of 40 million tonnes and is looking to boost that to 55 million this year.

Spot iron prices are trading at their highest level since April 2010.

($1 = 1.012 Australian Dollars)

(source: Reuters, Reporting by Michael Smith; editing by Balazs Koranyi)